Opinion: If Canada's Auto Industry Can't Survive, Let It Fade Away. Courting China Is Not the Solution.

Canada's automotive sector is in trouble. Plants are closing. Investment is fleeing. The U.S. tariffs have exposed the industry's vulnerability like never before. Now, the Trudeau government is turning to China in a desperate bid to keep the lights on. But propping up a dying industry by opening the door to cheap Chinese competition is not a solution. It is a surrender.

The Problem: A Sector in Freefall

It doesn't take an economist to see that the Detroit Three have been abandoning Canada for years. A decade ago, Stellantis, Ford, and General Motors assembled 1.3 million cars and trucks in Canada. By 2024, that number had fallen to just 400,000. Thousands of skilled workers have already lost their jobs, and the U.S. tariffs threaten to be the final nail in the coffin.

The root of the problem is deeper than just tariffs. Canada's auto industry is structurally weak. The current strategy looks suspiciously like an ongoing crusade to become a mere supplier of raw resources, first to England, then to the U.S., and now potentially to China. This is not a plan for a full-fledged industrial economy. It is a plan for servitude.

The False Solution: Courting China

The Carney government's recent deal with China is a perfect example of this defeatist thinking. In exchange for reducing tariffs on Canadian canola and other crops, we have opened the door to 49,000 Chinese-made EVs annually at a reduced tariff rate.

This is a disaster for three reasons:

It sacrifices our industrial base for staple exports. Trading autos for canola is a deal straight out of the 19th century. It tells the world that Canada is willing to abandon high-tech manufacturing jobs in exchange for raw resources. It is an admission that we have given up on being a value-adding economy.

It undermines our negotiating position with the U.S. As we prepare to renegotiate the USMCA, the last thing we want to do is signal to Trump that we are willing to sacrifice auto jobs in exchange for access to the Chinese market.

It invites a flood of cheap competition. While the government touts "joint ventures" and "technology sharing," the reality is that lower-cost Chinese vehicles will distort the competitive landscape. You cannot build a domestic industry by opening the door to a competitor that has a 10-to-15-year advantage in technology.

The Way Forward: Build Here to Sell Here

If Canada is serious about saving its auto industry, it needs a radically different approach. Not a surrender to China, but a demand that manufacturers who want to sell here must also build here.

For automakers of any nationality, the rule should be simple: a binding requirement to maintain manufacturing in Canada broadly proportionate to their sales here. Those who don't comply should face penalties for accessing one of the largest and most lucrative vehicle markets in the world.

Without that kind of muscle, the Carney government's China deal will be just one more nail in the coffin of an auto industry that was once the crown jewel of Canadian manufacturing. It is time to stop apologizing for our decline and start fighting for our future. If our manufacturers can't survive without selling off our sovereignty, then perhaps it is time to let them fade away.